Moody's rates Tenaska notes B1

Moody's Investors Service said it assigned a B1 rating to $360 million of senior secured bonds to be issued by Tenaska Alabama Partners LP.

Proceeds will be used to refinance existing debt, fund a six-month debt service reserve and pay associated transaction costs, the agency said.

The outlook is stable.

Moody's said concerns include the reliance on The Williams Cos. Inc. as a guarantor of the tolling contract with Williams Power Co., Inc. and that Tenaska operates in an overbuilt market.

These concerns are offset by the lack of construction risk, strong operating performance, an experienced operator and stable cash flows, the agency added.

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